NEW YORKYogaSmoga’s lead investor is pushing to convert the brand’s Chapter 11 petition into a Chapter 7 liquidation.

The filing Thursday by Durga Capital and the Ravi Singh 2015 Family Trust in a Manhattan bankruptcy court shouldn’t come as a surprise. The two were part of a group of creditors that forced YogaSmoga into bankruptcy proceedings through an involuntary Chapter 7 petition in November.

YogaSmoga filed its voluntary petition on Monday in a Manhattan bankruptcy court. In Durga’s filing on Thursday, it said five weeks ago it was clear that the yoga brand was suffering a severe liquidity crisis and couldn’t pay its debts as they came due. Now it wants the founders of the company — siblings Rishi and Tapasya Bali — to face the music and stop avoiding the unavoidable since the company is “almost entirely out of cash.”

Durga’s managing member Ravi Singh said in the November involuntary petition that he personally funded payroll expenses of $89,472 due to his “personal liability as director and shareholder.” Singh resigned from the board when the Chapter 7 petition was filed in November. Durga has an unsecured claim of $2.5 million, while the family trust has an unsecured claim of $200,000.

In Thursday’s document seeking conversion of the case, the legal papers said, “In what amounts to nothing more than ongoing and increasingly desperate attempts by the founders of the company to recover on their controlling equity stake, the debtor has now commenced a voluntary Chapter 11 proceeding, despite that fact that it is indisputably administratively insolvent — having acknowledged that after making its upcoming payroll payments [it] will have, at most, $18,000 in its bank accounts.”

Further the court papers said, “The debtor’s unwillingness to face the unfortunate reality that there are no reasonable prospects for reorganization should not be permitted to continue at the expense of its creditors….This Chapter 11 proceeding is nothing more than a delay tactic designed to destroy whatever recoveries remain for the debtor’s creditors.”

The document noted that the $18,000 “would be insufficient to fund even the administrative costs of a Chapter 11 case, let alone the costs required to propose a confirmable Chapter 11 plan of reorganization.”

It also noted that in the last several months, YogaSmoga “has been unable to secure” an outside source of financing. Further, the legal papers said the company “has never been profitable, and as of Sept. 30, 2016, the debtor’s current liabilities exceed its current assets by over $3,000,000.”

Separately, Tapasya Bali’s affidavit in the Chapter 11 case said annual gross revenues rose from $500,000 in 2013 to more than $2.3 million in 2015. She also noted that the company has been in discussion with Bain Capital and with the Jones Family Office, the privately held fund owned by Paul Tudor Jones. The combined transactions were expected to raise between $35 million to $40 million for YogaSmoga. The transactions never materialized, mostly over a valuation dispute.

Bali said Singh, who served as chairman and director of finance, valued the company at $250 million for purposes of the Bain deal, although that was later lowered to $150 million. Even the lowered valuation was too high, for Bali said Bain believed the company was worth “closer to $50 to $65 million,” in addition to not being profitable.

She said she believed that the company could “reorganize successfully because the debtor is taking steps to decrease expenses and increase revenue around a core profitable business.”

Rishi Bali said in an e-mail, “The lead investor of the company is trying to acquire the company for himself through a forced liquidation, which management is fighting.” He added that the “founders are making a loan to the company.”